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This assessment of European Union foreign policy towards the South Caucasus shows that while the EU has developed a coherent transport policy since 1992, paradoxically, it has had no corresponding coherent conflict resolution policy for this region. The fact that the EU deepened transport cooperation without a mediation policy in an area with a multiplicity of protracted conflicts is a puzzle. Although the EU eventually added mediation to its policy during the Russia-Georgia armed conflict in 2008, it was unable to facilitate a political solution. The research examines what has been the nature of EU foreign policy towards the South Caucasus. The dissertation argues that incoherence in conflict resolution policy has been consequent upon two causal factors: (i) preferences of the EU member states conditioned by their historical experience with Russia, and (ii) institutional framework of the Common Foreign and Security Policy (CFSP). By contrast, with functional approach, the three dominant factors that have enabled coherence in transport cooperation are (i) legislative alignment, (ii) common transport area, including technical assistance for transit development, and (iii) restrictive measures. Examination of these two areas of EU foreign policy, shows a discrepancy, demonstrating its inconsistent nature. The theoretical framework of realism and liberal intergovernmentalism, is applied to empirically grounded EU foreign policy analysis. Adopting a case study methodology, this work examines the EU's policy towards Armenia and Azerbaijan, with special focus on Georgia between 1992 and 2014. The research combines social science methods of literature review, document analysis and expert interviews.